The Hindu Business Line : Diaper capers

RECENTLY, when P&G declared its intentions of focusing on the diaper market instead of on detergent bars, it reinforced the potential of the category. The Rs 70-crore disposable diaper market may not have been growing by leaps and bounds as price continues to be the main impediment. But diaper brands have been steadily trying to correct the price-value equation and have been offering superior technology-driven products.

According to AC Nielsen ORG-Marg, the diaper market had been growing at 15-20 per cent annually for 2-3 years until last year, when it reported a decline of five per cent.

Reducing prices and changing technology, market leader Kimberly Clark Lever Pvt Ltd (KCL) is today offering its Dri-Fit diapers with 50 per cent more absorbent material using super absorbent material (SAM) for its Huggies brand. Claims Rajeev Mohan, Managing Director, Kimberly Clark Lever, "The New Huggies not only absorbs more but also lasts longer. The consumer gets a superior-performing diaper and high convenience at an affordable price."

At the relaunch of the Huggies brand with higher absorbency, Srikanth Srinivasamadhavan, Sales & Marketing Manager, Kimberly Clark, said: "SAM quickly absorbs fluid and converts it into dry gel-like material, locking fluid in the core of the diaper, keeping the baby's skin absolutely dry. SAM can absorb fluid up to 100 times its weight. This means that one gram of SAM can absorb up to 100 grams of fluid."

Besides, Huggies diapers have been incorporated with an outer cover meant to provide cotton-like comfort and double leak guards. The high leg-cut design was fashioned keeping the Indian climatic conditions in mind. Huggies diapers are available in colour-coded packs depending on their size. Huggies, which has a 70 per cent share in the diaper market, claims to be 20 per cent more affordable after its relaunch this September using the super absorbent technology.

With its market leader status in mind, Huggies also innovated with cheaper variants in the form of Nappi-pads. KCL claims to have pioneered the introduction of inserts as a concept in the Indian market. Nappi-Pads, to be inserted inside the cloth nappies, were introduced by KCL in 1997 to provide an inexpensive and hygienic alternative to cloth nappy users. While riding both the price and enhanced technology route, diaper makers acknowledge the barriers to the growth of the category. Explaining the main impediments to the growth of the category in India, Rahul Malhotra, Country Marketing Manager, P&G, India, says, "Disposable diapers are considered expensive. In India, cloth is perceived as Grandmother's gold standard for baby's skin despite diapers providing better protection and skincare." Today, P&G's Pampers variant, Fresh & Dry, is 17 per cent cheaper than its earlier variant, Pampers Comfort.

Pampers has been present in India since 1995-96. The distribution was outsourced to Marico for a few years. With the recent launch of Fresh & Dry, P&G has started marketing and distributing Pampers on its own. Declares Shantanu Khosla, Managing Director, P&G, "Diapers is a focus area for the company and has huge potential." With a five per cent share in the diaper market, Pampers' USP is one of superior performance at an affordable price.

Apart from the premium pricing, the Indian mindset regarding the usage of the product also needs to be changed. Claims Srinivasamadhavan, "The Indian consumer, in general, has an attitudinal barrier towards disposables, which is one of the main impediments towards their growth. The Indian mother is a cost-conscious woman and would like to recycle most of the products used for her household. The same applies to the products used for her baby too. This acts as a main barrier towards disposable diapers in India. Also disposable diapers' usage is mainly restricted to out-of-home occasions which are relatively fewer while the baby is in the diapering age."

In spite of the barriers facing the category's growth, Godrej Consumer Products decided to acquire the Snuggy brand from Shogun Industries late last year. Apart from the purpose of having more brands to ride its distribution chain, Godrej realised the importance of having a brand name such as Snuggy, which could lead it to becoming a complete baby care brand.

Says Hoshi Press, Executive Director, Godrej Consumer Products, "Acquiring the Snuggy brand gives us an opportunity to get into more baby care products such as soaps, oils and creams." Recently, Godrej relaunched the Snuggy brand of diapers in slimmer and smaller pack sizes and is looking at scaling down prices in future.

Technology to manufacture the products, however, remains elusive in India. For instance, Snuggies continues to import the products and so does P&G from its subsidiary in other countries. Explains Kimberly Clark's Srinivasamadhavan, "It is quite a challenge for the marketers to manufacture disposable diapers in India. That stems from the fact that disposable diapers' manufacturing requires very high-end technology and hence, high capital cost. Also, most of the raw materials for disposable diapers are imported. To top it all, the penetration level and the usage frequency of disposable diapers is very low. This in turn makes the gestation period to break-even very long." Diapers as a category have a long way to go before they get onto more baby bottoms.

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